Hospitality Business Strategy

This report analyzes the influence of macro environment factors over the hospitality industry using PESTLE and SWOT models. It also examines the internal capabilities of the organization using McKinsey's model and Porter's Five Forces Model to determine external factors that impact competitiveness. Strategies to improve competitive edge and market position are evaluated based on the outcomes.

Hospitality Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
PART A ..........................................................................................................................................1
Applying pestle and swot model analyse the influence of the macro environment factors over
the hospitality industry ..........................................................................................................1
Critically examine the hospitality macro environment to determine and inform strategic
management decisions ...........................................................................................................3
Using the McKinsey model analyse the internal capabilities of the organisation .................3
Critically evaluate the internal environment to assess strengths and weaknesses of an
organisation’s internal capabilities, structure and skill set.....................................................5
Define the external factors which can impact in the competitiveness using porter five forces
model .....................................................................................................................................5
Devise appropriate strategies to improve competitive edge and market position based on the
outcomes.................................................................................................................................6
PART B ...........................................................................................................................................6
Define the different types of strategic directions available to the organisation. ...................6
Define the most suitable growth strategy for the organisation using ansoff matrix ..............6
Draw a strategic plan including the theories and concepts within the hospitality industry? .7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
It is very significant for the business enterprise to use the various business strategies in
order to be effective and efficient manner. There are various business strategy which need to be
considered by using the different models. The hospitality industry is the most growing industry
where it need to focus on the different considerations in order to serve the best to its customers.
It is very important for the hospitality industry to take measures in order to conduct the business
organisation effectively. There are various external and internal factors which need to be taken
into account and these can impact the business operations. The organisation which is chosen for
this report is Glengorm Castle hotel. The organisation is based on United Kingdom. (Shulga,
L.V., Busser, J.A. and Bai, B., 2021). This report will include the use of various models such as
pestle, swot, McKinsey’s model, porters five forces model. Further it will also include porters
generic model, ansoff and a strategic plan.
MAIN BODY
PART A
Applying pestle and swot model analyse the influence of the macro environment factors over the
hospitality industry
It is very essential for the business organisation to consider the various internal and
external factors which have a influence of the macro environment over the hospitality industry
and over the business organisation. The various use of the model is discussed below:
PESTLE Analysis- This is the tool or framework which is used by the business
organisations in order to identify the various external factors which can impact the business
organisations and its operational activities. There are various factors which have a impact over
the Glengorm Castle hotel which are discussed below:
 Political- this is the elements which is concerned with the extent to which the
government policies may interfere within the business operations and its activities. Such
factors include trade restrictions, tariffs etc. it is very important for the hospitality
industry to be aware of the government policies within the country. In context of
Glengorm Castle hotel there is the impact of political factor has the government has the
full control over the business activities and restrictions which can impact the
organisation.
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 Economical- This is the factor which is related to the direct impact on the performance
of the world which can influence the business organisation and its operations. Such
factors include taxes, inflation rate etc. it is very important for the hospitality industry
that they focus on the various changes which is happening around the economy which has
a positive and negative impact over the business organisation. In context of Glengorm
Castle hotel there was impact of the pandemic where the inflation rate was high and the
disturbance in the economy has affected negatively to the organisation.(Gajjar, T. and
Okumus, F., 2018)
 Social- This is the factor which is related to the current trend in the market which can
influence the business organisations and its operations. Such factors include attitude,
behaviour, lifestyle of the people within the country. As in context of Glengorm Castle
hotel it is identified this is the most important factor which need to be taken into
consideration as in order to maintain the accommodation services it is very important for
the organisation to understand the lifestyle and the preferences of customers.
 Technological- This is the factor which is related to the invagination and development
which is happening around the world and this can influence the business organisation and
its business operations. Such factors include research and development, digitalisation,
automation etc. in context of the hospitality industry and the hotel it is identified that after
pandemic it is very important for the organisation to adopt the new technologies which
include the proper sanitisation and self check in and check out in order to avoid the
physical contact. (Han, W. and Bai, B., 2022)
 Legal- This is the factor which is related to certain laws which are mandatory to be
followed and can have a influence over the business activities. Such factors include
employment law, safety law etc. it is very important for the organization to apply with the
safety measures for its employees in order to avoid the strict actions from the
government. This is most important for the Glengorm Castle hotel as they need to be fair
with employees and keep them satisfied in order to have a smooth functions of the
operations within the business enterprise.
 Environmental- This is the factor which is related to the happening in surrounding can
impact the business organisation. Such factors include climatic changes, weather
conditions, sustainable development etc. it is very important for the organisation specially
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in hospitality industry that they practice sustainable development in order to build image
and be more concern of the safety of the environment. This will help the organization in
maintaining its brand value.
SWOT analysis
Swot analysis is the model which is taken into consideration by the business enterprise in
order to identify the various internal and external capabilities in order to perform business
activities in the effective and efficient manner. The company is able to analyse its its strength
and weakness and opportunities and threats in order to adopt the growth and development. The
swot analysis of the Glengorm Castle hotel is mentioned below;
Strength Weakness
 The one of the biggest strength of the
business organisation is that it is well
established in United Kingdom. This
company is famous for its hospitality
services.
 The one of the main weakness of the
organisation is that it is not expanded
and need to expand its market in order
to be competitive.
Opportunity Threats
 The company has several opportunity
to improve over the services and also
the company can expand its business in
the other market.
 The company has the threat of
competitors which need to be
considered by the Glengorm Castle
hotel
Critically examine the hospitality macro environment to determine and inform strategic
management decisions
As from the above discussion of the macro environment in order to determine the various
factors which can influence the business decisions. It is identified that the hospitality industry
need to be aware of the various factors which can influence the business organisation and
activities. It is very important for the company to focus on the various opportunities and threats
Using the McKinsey model analyse the internal capabilities of the organisation
It is very significant for the business organisation to find out the various internal
capabilities in order to be effective and efficient while performing the different activities. The
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model which has been taken into consideration in McKinsey 7s framework which is the model
which is used by the organisation in order to ensure of the well being and future success of the
business organisation. There are 7 s in this model which is explained below;
 Strategy- This is related to the plan which is deployed by the business organisation in
order to remain competitive within the industry. it is very important that the company
focus on a specific approach in order to be effective and efficient while performing the
different task. The company can focus on the systematic strategy where the clear
communication is taken place and the people are able to work effectively.
 Structure- This is related to the hierarchy which has to be followed within the business
organisation in order to be effective and efficient while performing the different task. It is
analysed that the company need to follow a structure so that they can communicate well
and there is the transparent working between the employees and employers. (Harrington,
and et.al., 2019)
 System- This is defined as the daily procedures, workflow and the decisions which help
the company to make up for the standard operations within the business enterprise. There
should be a system which need to be followed in the Glengorm Castle hotel so that they
can conduct business activities effectively.
 Shared values- This is defined as a common standards or values which is accepted by all
the employees and norms in order to function within the business enterprise. This is
explained that it is very important for the company to prepare and share the guideline to
the staff members where everyone is expected to follow norms and behaviour within the
workplace.
 Skills- This is defined as the capabilities and talent of the staff members of the
organisation and the management of the company. This determines the type of the
achievement and work the business organisation can accomplish. The skill of the staff
members is utilised within the organisation at the time of decision making and bringing
the best in the services of the Glengorm Castle hotel. (Pius, and et.al., 2020)
 Style This is referred to as the approach which is taken into consideration by the business
organisation in order to lead the company. This is also related to how the company is able
to influence the performance, productivity and corporate culture.
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 Staff- This is defined as the personnel of the business organisation who performs the
different task in order to be effective and competitive within the market.
Define the external factors which can impact in the competitiveness using porter five forces
model
Glengorm castle hotel is one of the most premier hotel establishments in the UK and is
located in a posh location surrounded by some of the best views that the country has to offer
which makes it an integral part of the overall hospitality industry in the country. However, this
industry’s overall outlook has suffered tremendously due to the advent of the COVID-19
pandemic and the way Brexit has opened up multiple fault lines in the country. In order to
extensively study the environment of the hotel in order to highlight the difficulties it is facing
and propose possible solutions to improve its current situation, some models of strategic
management have to be used such as Porter’s 5 forces. This model of strategic management is
used to analyse the current economical ongoing and market conditions in an industry to find outs
its current lucrativeness and plan activities of the business accordingly. This model has been
applied herein in context of the company and the hospitality industry in general. (Rivera, M.,
Kizildag, M. and Croes, R., 2021)
 Threat of new entrants – The power of this force was initially low as the capital
investment require to setup a new luxury hotel is quite high but this changed due to the
internet which has reduced the investment needed upfront which is why currently, this
force’s power is medium. (Boğan, E. and Dedeoğlu, B.B., 2019)
 Bargaining power of customers – This power is very high as the new age customers are
very knowledgeable, are tech savvy and it costs virtually no money for them to switch
towards better alternatives and hospitality is based upon industry outlooks
 Bargaining power of suppliers – This is quite low and not very impactful on the
business separations of Glengorm castle as role of suppliers is quite minimum as firm’s
access to resources is quite robust
 Availability of substitute products – This force is medium for the type being as the
hotel Glengorm castle sits in a very exotic location and its infrastructure capability is
quite unique which makes it difficult to find alternatives in the industry
 Competitive rivalry – This force is quite high as there is rapid competition in the
industry and he advent of social media and various applications have made it so that there
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is rivalry even in niche segments such as self-catering and B&B which Glengorm castle
specializes in. (Muliadiasa, I.K. and Aprinica, N.P.I., 2021)
Evaluate appropriate strategies to improve competitive edge and market position based on the
outcomes
It is identified that the organisation can focus on the various strategies which will help
them to being competitive. It is very important for the organisation to improve over the services
and improve the quality of accommodation which can help in attracting customers. Also the
company can focus on the various other aspect on improve the structure and system of the
company so that employees are motivated.
PART B
Define the different types of strategic directions available to the organisation.
These are general strategies provided by Michael Porter whose application can be done
across all major industries and they have been applied herein in context of Hotel Glengorm castle
in London.
 Cost leadership – This strategy involves achieving economies of scale and benefit of
low cost margins through increased production capacity. It is not advised for the hotel to
go for this approach given its novelty design and luxurious outlook
 Differentiation – This strategy is much more product and service oriented and involves
developing new product and service lines to gain edge over other hotels. It is advised for
Glengorm castle to develop new B&B menus and new luxury products to take advantage
of the industry (Nunes, S., Estevão, C. and Filipe, M.N., 2018)
 Focus – With this strategy, firms either focus on super niche markets to develop new
product lines and expand their customer base or study the market thoroughly and adapt
their production capabilities to product a lot of goods for cheap. It is advised for hotel
Glengorm castle to focus on market differentiation.
Define the most suitable growth strategy for the organisation using ansoff matrix
It is very important for the business organisation to adopt the growth strategy for the
development of the business enterprise. The ansoff model is the tool or framework which helps
in analysing the different growth strategies which are discussed below;
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 Market penetration- This is the market strategy where the company can focus on the
increasing of the sales within the existing products into existing market. It is very
important for the organisation. This is the strategy which can be used by the business
organisation in order to increase its sales and revenue.
 Market development- This is the strategy where the organisation can focus on the new
market with existing products. It is very important for the organisation to find the new
market where it can expand its business with the same services. (Davidson, R., 2018)
 Product development- This is the strategy where the company need to introduce the new
product or services into the existing market. This will help the organisation to increase
its sales and revenue by developing the product in order to attract customers.
 Diversification- This is the most risky strategy where the business organisation need to
develop the new product or service with the new customers. This is the strategy where the
company has the high risk of the development because of the new market and new
product .
From the above discussed of the various strategies it has been identified that the company
can focus on market development where it can find new customers. This is the strategy which
will help the organisation in increasing sales and targeting new customers. It is very important
for the business to grow in an effective and efficient way.(Murillo, E. and King, C., 2019)
Draw a strategic plan including the theories and concepts within the hospitality industry?
It is very important for the business to make a plan in order to promote its products or
services effectively and efficiently. The business plan for the hospitality industry has been
discussed below:
Summary- this is the plan where the Glengorm castle hotel need to expand its business
in the other market. This is most important in order to develop and grow business in an effective
and efficient way. Here is the plan which has been made in including the objectives..
Objectives- In order to increase the market of the hospitality and the organisation. The
another objective is to give the valuable services and accommodative to its customers.
Market strategy- it is identified that the business organisation can focus on the market
development strategy
Action- It has been planned that the company can use the market development strategy which
can help the organisation to increase its sales and revenue. This will also help the organisation to
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improve it services in the other market and target new customers. (Presenza, A. and Petruzzelli,
A.M., 2019).
CONCLUSION
From the above report it has been identified that the business strategy involves the use of
the various theories and models in order to improve the business operation and activities. In
context of Glengorm castle hotel the company need to analyse the macro and micro external
environment which can influence the business activities it is every important or the organisation
to focus on the various strategies in order to target the right set of customers and remain
competitive. It is very important that the company focus on the market development strategy in
order to expand its business.
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REFERENCES
Books and Journals
Boğan, E. and Dedeoğlu, B.B., 2019. The influence of corporate social responsibility in
hospitality establishments on students’ level of commitment and intention to
recommend. Journal of Hospitality, Leisure, Sport & Tourism Education, 25, p.100205.
Davidson, R., 2018. Business events. Routledge.
Gajjar, T. and Okumus, F., 2018. Diversity management: what are the leading hospitality and
tourism companies reporting?. Journal of Hospitality Marketing & Management, 27(8),
pp.905-925.
Han, W. and Bai, B., 2022. Pricing research in hospitality and tourism and marketing literature: a
systematic review and research agenda. International Journal of Contemporary
Hospitality Management.
Harrington, and et.al., 2019. From goods-service logic to a memory-dominant logic: Business
logic evolution and application in hospitality. International Journal of Hospitality
Management, 76, pp.252-260.
Muliadiasa, I.K. and Aprinica, N.P.I., 2021. Marketing Strategy for Chinese Market to Increase
Room Occupancies at The Plataran Ubud Hotel. Journal of Business on Hospitality and
Tourism, 7(1), pp.50-63.
Murillo, E. and King, C., 2019. Why do employees respond to hospitality talent management:
An examination of a Latin American restaurant chain. International Journal of
Contemporary Hospitality Management.
Nunes, S., Estevão, C. and Filipe, M.N., 2018. Determinant factors of competitiveness in the
hotel sector: the case of Portugal. Competitiveness Review: An International Business
Journal.
Pius, and et.al., 2020. Contemporary Quality Management Approaches and Practices Within the
Hospitality Industry. In Contemporary Management Approaches to the Global
Hospitality and Tourism Industry (pp. 1-34). IGI Global.
Presenza, A. and Petruzzelli, A.M., 2019. Investigating business model innovation in Haute
Cuisine. Role and behavior of chef-entrepreneurs. International Journal of Hospitality
Management, 82, pp.101-111.
Rivera, M., Kizildag, M. and Croes, R., 2021. Covid-19 and small lodging establishments: A
break-even calibration analysis (CBA) model. International Journal of Hospitality
Management, 94, p.102814.
Shulga, L.V., Busser, J.A. and Bai, B., 2021. Hospitality business models, customer well-being
and trust: the mediating role of competitive service advantage. International Journal of
Contemporary Hospitality Management.
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